Our media and conversations are consumed by the future of work, which tends to quickly reduce to concerns over the spread of AI and what it will mean for jobs. I’ve noticed that the discussion quickly turns to what skills we will need to continue to be employable in the future, especially when the participants have children who are trying to prepare themselves for the world ahead.

The static world of skills

We’re focusing on the wrong thing. Focusing on skills betrays a static view of the world. The assumption is that if we acquire certain skills, we will be protected from the onslaught of the robots and the rapidly changing world around us. It ignores the fact that the average half-life of a skill is now about five years and continuing to shrink.

It’s precisely that static view of the world that is our biggest barrier. We need to find ways to prepare ourselves for a world where learning is a lifetime endeavor. The question then becomes: what will help us to learn faster so that we can quickly acquire whatever skills are required in the moment?

The learning pyramid

In that context, we would all benefit by expanding our horizons and exploring the learning pyramid outlined below that can ultimately become the key to sustained and accelerated learning for all of us. Skills are at the top of the pyramid – they are ultimately what helps us to achieve impact and create value in a specific context.

Putting knowledge into context

But, let’s dig a bit deeper. Skills are about “knowing how.” Knowledge – the second level of the learning pyramid - is about “knowing what.” Our schools tend to focus on broad-based knowledge like history, economics and science that give us a context for understanding the world we live in, but the knowledge here tends to be reduced to facts and figures that can be recited on a test – it truly is about “knowing what” rather than “knowing why.”

Even at this level, though, the knowledge is largely about the broader context that we all live in – it's rarely about the narrower contexts that we confront on a daily basis – our families, our circle of friends or our local community. It turns out that success in our lives will ultimately hinge on our ability to deeply “read” these narrower contexts to quickly understand the key elements and dynamics that shape them.

In part, this is because skills are inevitably context specific – they involve knowing how to act in a given context. In a world that has been driven by increasing standardization, there's often been a tendency to underplay this aspect of skills, especially in the business world. We're supposed to believe that our skills can be applied in the same standard way across most, if not all, contexts.

Capabilities that drive learning

That leads to the third level of the learning pyramid – capabilities. Supporting the development of skills and a deeper understanding of our contexts are more fundamental capabilities. These capabilities can take many different forms but, in my mind, the core capabilities are curiosity, imagination, creativity, critical thinking and social and emotional intelligence. If we cultivate these capabilities, we'll be able to quickly understand the evolving contexts we live in and acquire the skills that will help us to operate successfully in very specific contexts.

It can get confusing because many people refer to these capabilities as skills, sometimes calling them “enduring skills” or “basic skills.” I believe it's helpful to draw a sharper distinction between skills that are very context specific and tend to evolve at a rapid rate versus the capabilities that will help us to quickly and effectively “read” our contexts and develop the skills that are most appropriate for that context. Skills grow obsolete at an accelerating rate while our capabilities not only endure, they help us to more quickly acquire the knowledge and skills we will need to be successful.

Passion as the foundation of learning

But, wait, there’s more. What will help us to cultivate and deepen those capabilities over time? I would suggest that there’s an even more fundamental level supporting the learning pyramid, one that often gets ignored, but that ultimately is essential if we are serious about learning faster over time.

The foundation of the learning pyramid needs to be passion. It’s a very specific form of passion that we have identified in our work at the Center for the Edge – the passion of the explorer – that I've written about here, here and here. This form of passion has three components – (1) a long-term commitment to achieving an increasing impact in a particular domain, (2) a questing disposition that seeks out and is excited by new challenges and (3) a connecting disposition that actively seeks to connect with others who might be helpful in addressing these new challenges.

People who have this form of passion are driven to cultivate the capabilities that will help them to learn faster and acquire whatever knowledge and skills are required to succeed in their chosen domain. Sure, without this passion, we might still develop some of the capabilities required to learn faster, but we’ll be unlikely to nurture them to the extent of someone who has this passion and we we’ll be unlikely to apply these capabilities as aggressively as someone who is constantly striving to increase their impact in a particular domain.

Broadening our horizons

So, why does all of this matter? As I mentioned at the outset, virtually all of our conversations on the future of work are focused on the wrong thing. We’re understandably worried about our skills becoming obsolete (or, more accurately, performed much more efficiently by ever smarter machines). Understanding and embracing the learning pyramid can help us to broaden our horizons and focus on the elements required to learn faster. We’ll never equip ourselves to be successful in our lifelong learning journey if we don’t broaden our horizons and find a passion that will drive us to learn faster and nurture the capabilities required for learning.

Re-thinking our institutions

At a broader societal level, the learning pyramid can help us to understand how our institutions will need to evolve to support life-long learning. If I’m right about the learning pyramid, our educational system will need to be re-thought and re-designed from the ground up. Rather than focusing on transmitting broad-based knowledge and building skills, our schools will need to shift their focus to cultivating capabilities and drawing out and nurturing the passion that is latent within all of us. Rather than giving out certificates verifying that specific knowledge or skills have been acquired, schools will need to expand their horizons and become life-long learning coaches that get to know each of us individually at a very deep level and can help and challenge us to learn even faster throughout our lives by building deep and long-term trust-based relationships.

But, it doesn’t stop with our educational system. As I’ve written about elsewhere, all of our institutions will need to be re-imagined. Rather than thinking about learning as something that occurs in the occasional training programs that support a scalable efficiency operation, we’ll need to re-imagine our work environments in ways that can support scalable learning, learning that occurs day to day, on the job, in the work environment. If we’re serious about scalable learning, we’ll need to find ways to cultivate and amplify the passion of everyone who participates in our institutions. And, by the way, don't fall prey to the current focus on worker engagement. As I've written about here, worker engagement is helpful, but the success of our institutions in a world of mounting pressure will require us to find ways to cultivate passion among our workers.

The learning journey of the individual

And, what about us as individuals? How do we harness the learning pyramid to thrive in a world of accelerating change?

First, we shouldn’t wait for all of our institutions to catch up and help us to learn faster. That will take time and there’s urgency to acting quickly as our skills are at increasing risk of becoming obsolete.We need to shift our attention to cultivating the capabilities required to learn faster. And how do we do that? Well, there are certainly a broad range of books and courses that focus on developing the core capabilities that I described above. But those can only go so far.

We’ll be much more successful if we focus on the base of the pyramid and find a domain that we can be truly passionate about. Most of us went to work because we wanted a paycheck. It turns out that paycheck will increasingly be dependent on finding work that we are truly passionate about. Without passion, we’ll never learn as fast and as effectively as someone who does have that passion. In a world of mounting performance pressure, that means we will become increasingly marginalized. Find your passion and the paycheck will follow.

If you haven't yet found your passion, don't stop. Many of us did not discover our passion until later in life (and many are still looking). In the meantime, focus on cultivating the capabilities for learning faster because those will help you to explore a variety of domains until you connect with your passion.

Bottom line

The current discussion of the future of work is a reflection of the short-termism that increasingly dominates business and all of our institutions. Get the right skills and everything will be alright. Beware - if we shrink our time horizons, we’ll get blind-sided by events on the horizon that come at us with increasing speed.

If we truly want to turn mounting performance pressure into expanding opportunity, we need to make a journey to the base of the pyramid. Until we find something that we can really be passionate about, we’ll experience increasing stress and, no matter how hard we try to learn, we’ll never learn as fast as those who have connected with their passion. But, here’s the real prize: when we connect with our passion, we will achieve far more of our potential and have far greater impact in the world around us. Isn’t that something worth striving for?

Where’s the advantage? In traditional business strategy, the answer was easy: build a wall. The companies with the highest and strongest walls would win. In the Big Shift, that answer becomes less credible. Walls work in stable worlds but they can actually become obstacles in more rapidly changing worlds. In the exponential world we’re entering, walls may be replaced by networks as the most promising sources of advantage.

I’ve become increasingly interested in how strategy will evolve in the Big Shift as revealed here and here. In this posting, I want to focus on the implications for how we think about competitive advantage. There’s no question about it – traditional sources of competitive advantage are eroding as revealed by our own analysis of long-term return on asset trends in the US economy and the well-known study of the rapidly shrinking lifetime of the successful companies that make it onto the prestigious S&P 500 list. What used to protect us from competition is becoming less and less effective.

Building walls

How did we build advantage in the past? We built walls. The walls took many different forms, but the key was to block potential competitors from entering our markets and taking our customers. One of the best ways of doing that was to acquire some proprietary knowledge, ideally something that could be protected with patents and copyrights. Even better if we could harness economies of scale that would reduce the number of companies operating in our markets – the economies of scale would become high walls that even the most intrepid challenger would find intimidating to scale.

These walls worked very well in stable times. Once built, they were durable and reliable. Companies could then focus all their time and energy on driving greater and greater efficiency into their operations to increase profit margins. Life was good.

But the times they are a’changing. The walls are becoming less and less effective in keeping competitors out. If the walls are based on proprietary knowledge, the accelerating pace of change means that proprietary knowledge is becoming obsolete at an accelerating rate.

If the walls are built around economies of scale, we’re seeing a variety of options opening up that can help new entrants overcome this barrier. For example, with contract manufacturing, a new entrant can leverage a promising new product by relying on the scale manufacturing capabilities of others. Similarly, new entrants can find ways to reach potential customers at scale by leveraging global market platforms – they no longer need to build their own scale-driven distribution channels.

So, does that mean that the potential for competitive advantage no longer exists? Far from it. It’s just that the sources of advantage are shifting in ways that most companies don’t yet understand, much less effectively harness.

Cultivating networks

In a more and more rapidly changing world, the key source of advantage will reside in the ability to become a concentration point for knowledge flows so that we can learn faster and gain the insight required to more effectively harness the long-term forces that are reshaping our global landscape.I originally wanted to call this new source of advantage “bridges” because it provided such a visual contrast to walls, but there was a problem. Bridges, at least the physical ones that we know, have a key limitation – the more people who want to cross the bridge, the more crowded it gets, and eventually it turns into a parking lot, blocking any movement.

What we need are bridges that are capable of infinite expansion. More importantly, we need bridges where, the more people who use them, the more valuable the bridge becomes. What we need, in effect, are networks, capable of infinite connections, building bridges that can expand in all directions. So, I’m going to refer to the new source of advantage as networks, but primarily because they represent a new kind of bridge.

Recently, I wrote about networks as a new form of “net worth” for individuals, but it turns out that networks are also emerging as a key form of net worth for companies, even though not explicitly measured on the balance sheet.

Finding and occupying influence points

So, what’s required to become the concentration point of an expanding network? In an earlier blog post, I identified these concentration points as “influence points” and explored what the attributes of the most powerful influence points are likely to be.

Influence points matter. If you don’t understand what the emerging influence points in your relevant market arenas are likely to be, you’re in trouble. It means you certainly will not be effectively targeting them and, perhaps even more importantly, you will not understand what the implications will be if someone else occupies those influence points.

And here’s an important point: if you intend to build and occupy an influence point, there’s significant urgency. Influence points are driven by network effects which means that, once someone manages to occupy an influence point, they will be very difficult to challenge. That’s a key source of their advantage. So there really is not an option of being a “fast follower” if you want to harness this new form of strategic advantage. If you’re not first to critical mass in an emerging influence point, the game is likely over.

And just to be provocative, leaders who adopt the feminine archetype are going to be much more successful at building and occupying influence points. Leaders who adhere to the masculine archetype will be drawn to those walls and face considerable challenges if they venture beyond those walls and try to cultivate networks. It's one of many reasons that I maintain that the feminine archetype will ultimately prevail in business over the masculine archetype.

Choices to be made

To effectively target and occupy an influence point, companies will need to step back and ask the most fundamental question of all: what business am I in? I have suggested in other venues that most companies today are an unnatural bundle of three very different business types: infrastructure management, product innovation and commercialization and customer relationship businesses.

The companies that are most likely to occupy emerging influence points will be those who are tightly focused on either infrastructure management or customer relationship businesses (but not both – they’ll need to pick one). And, by the way, if you choose to focus on the product innovation and commercialization business, you’ll have a much harder time finding and occupying influence points – it’s one of the reasons I believe that those businesses will tend to fragment over time and have relatively high turnover rates.

The value of influence points

Influence points are strategically important because they concentrate knowledge flows in ways that help the owner of the influence point to learn faster and accelerate performance improvement. But, in a more rapidly changing world, there will need to be reciprocity here. If the owners of the influence points simply focus on aggregating, analyzing and acting on the knowledge for their own benefit, they will be increasingly vulnerable to challenges from those who offer to provide more value back to the participants in terms of feedback loops that can help everyone to learn faster, not just the owner of the influence point. There’s an interesting dynamic here: the more rapidly everyone learns and improves their performance, the more valuable the influence point becomes. Reciprocity actually strengthens advantage.

As we become more focused on the potential of artificial intelligence, the strategic value of influence points increases for one simple reason: artificial intelligence without access to lots of data is actually pretty stupid. Influence points become natural sites for the aggregation and rapid refreshing of data. Whoever owns these influence points will have a natural advantage in harnessing the insights and value that can be generated from artificial intelligence because they will have access to far more data than anyone else.

Advantage for individuals and countries

So far, I've been talking about strategy from the viewpoint of companies, but the same basic shift is playing out at the level of individuals and countries as well. Think about it. For individuals, the key to success was to accumulate a set of degrees and experiences that would qualify someone as an “expert.” In other words, advantage was built on proprietary knowledge that would insulate you from challenges by anyone else.

Now, it’s becoming increasingly apparent that if you consider yourself an expert, you simply don’t understand how rapidly the world is changing. The key to success going forward is the ability to cultivate rich networks of relationships with diverse people who can help you to learn faster. The strategy for success for individuals in the future will hinge on the ability to become a concentration point for a growing number of relationships – and on the ability to harness those relationships to learn faster.

There’s a similar dynamic playing out for cities, regions and nations. It used to be that your advantage at this level hinged on some set of natural resources or locational advantage (for example, having a coastal area with a natural harbor). That’s less and less true. The cities, regions and nations that are surging ahead are those that manage to become gathering spots for people with rich networks of relationships, and increasingly, relationships that extend well beyond existing geographic boundaries. In this context, I wrote a perspective several years ago that we need to shift our focus from the BRIC countries to the LUSTI countries, precisely because the latter are driven to connect beyond their borders because they were so small.

Walls as a source of vulnerability

So, if the sources of strategic advantage are shifting from walls to networks, what about those who continue to seek to hide behind walls? The walls that were so helpful in providing protection are increasingly becoming barriers to building the sources of advantage that are necessary for success in the Big Shift world. What were very effective sources of protection are now becoming sources of vulnerability. The illusion of protection breeds complacency and blinds us to the changes that are undermining our positions.

Bottom line

Feel the fear. If you’re not afraid, you don’t understand the changes that are playing out in the world around you. But don’t let the fear overcome you. Resist the temptation to hide behind the walls that served you so well in the past. Venture out into unfamiliar territory and find ways to connect with others that are facing similar challenges. By coming together and leveraging a growing array of diverse assets and capabilities, you will discover the ability to cultivate more and more of your potential and turn challenges into ever expanding opportunities.